Apr 26, 2024 - Health
Hospitals mount uneven recovery from the pandemic
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Some health systems have recovered from the pandemic much better than others, and those with healthier margins tend to be the ones that made a stronger push into outpatient care.
The big picture: There's a wildly large and growing difference between the operating margins of top-performing health systems and those at the bottom, according to Kaufman Hall data shared with Axios.
- "The hospitals that are not performing well are performing worse, but the hospitals that are recovering are performing extremely well," firm co-founder Ken Kaufman told Axios.
- "I would say hospitals that are not doing particularly well … they're not capturing that outpatient work, or at least not at the level that they need to," he added.
Yes, but: Operating margin is only one measure of a hospital's financial health, and total margins are often much higher, said Johns Hopkins professor Gerard Anderson.
- "You diversify where there is potential profit, and they have moved into all sorts of things where there is profit," he added. "They have a whole portfolio of ways to make money now that they didn't have 20 years [ago]."
- Some experts also say that hospitals aren't disciplined about keeping costs down.
- "I think partly what happened over time is that … investments were not treated as investments, but as costs," said Yale economist Zack Cooper.
Go deeper: Hospitals forced to revamp business models or risk losing patients
